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Tuesday, February 6, 2018

Anatomy of Our Current Housing Dilemma

If you're following us on Twitter, you know that we're currently dealing with loud, inconsiderate neighbors in the apartment below ours. They blare music at night, hold thunderous conversations, interrupt our sleep, and basically make our home feel like a place we want to avoid. Our lease ends in June, so we're looking at another five months of living on edge.

If you've ever gone through something similar, please accept my sympathies. Having your space besieged by noise, especially when you're thisclose to drifting into dreamland, is both physically and emotionally exhausting.

I have little control over what my neighbors decide to do: we've talked to them, we've contacted management repeatedly, and we've filed a complaint with the police, so we've kind of exhausted our options. Thus, I'm trying to focus instead on what we can do and what our options are.

The first thing we're trying to figure out is whether we want to stick out our lease or break it early.

If we stay, I will probably continue to have nightly heart palpitations as the music starts blasting through my floor just as I've closed my eyes (or - probably a better choice - I will force myself to take up yoga and meditation). Money-wise, though, it's a strong option, and lately I've been surprised at just how motivated I am by our financial goals. So sticking it out is certainly not out of the question.

If we break it early, we'll have to pay rent until the landlord finds a new tenant. We're fairly certain he'd be able to do so within a few months at most. Our apartment is in an excellent location, has some gorgeous views of the surrounding hills, and is reasonably priced (all huge reasons we decided to lease this abode in the first place, and all reasons we were hoping to stick around for several years). But we'd be on the hook for up to $7000 in rental payments, and that's... a lot of money.

Regardless, we know we'll be out of here by June, so the question at that point is whether we should rent elsewhere or purchase a house.

The argument for purchasing is that we're committed to living in this town: we're not going anywhere. It's likely that a mortgage would be equivalent to (or possibly even less than) what we'd be paying in rent. The problem is that the housing market here is limited, expensive, and exceedingly competitive. The average price of a single family home is around $400K, and many folks offer to pay in cash to sweeten their bids (that is so far outside the realm of my own experience and abilities that I can't really wrap my mind around it). Our credit scores are excellent, our income is solid, and we're eligible for a VA loan, but we don't have a lot of money for a down payment. If we do decide to buy, we're likely looking at months of searching, multiple offers, and multiple rejections.

The whole thing sounds like a complete circus, and not in a good way. Part of me is so annoyed with the current housing market that I don't want to deal with it at all.

If we opt to rent again, we'll definitely be looking at townhouses or single-family homes. No more shared walls on all sides for us. Rent for such properties is expensive, and for what we need, it's likely to exceed a mortgage payment. There's no doubt that rent would increase on a yearly basis. On the other hand, we won't have to deal with maintaining or fixing up a new home, and we can find something that comes with all necessary appliances.

Sometimes I wish we weren't so invested in such an expensive community, but here we are. We love our town. These are the choices.

If you have advice for us, I'd love to hear from you. Have you ever been in a similar situation? What was your course of action?

10 comments:

I vote for sticking it out and then renting a house. You'll pay more than in mortgage payments, but you also won't have to keep funds to replace the roof and whatever else -- maintenance is quite expensive. And it'll give you time to get rid of more debt and to build a real down payment so that when the housing market crashes again, you'll be ready to buy.

That's a terrible situation. As someone who has lived in apartments my entire adult life, I understand the frustration of neighbours. If they are disruptive to the point of the police being called, why can't they be evicted?

I am definitely inclined to rent, but purely because I am terrified of owning and of the unexpected costs (like roofs that need replacement). If you are planning to stay put for a long time, then it might be a reasonable time to buy...but also reasonable to hold out for a while to build up a bigger down payment.

Thank you, Solitary Diner! YES, it does seem rather unfair that the neighbors can do pretty much whatever they want and not get kicked out. Management *said* they would be evicted, but I don't think that's actually going to happen. I think management is just trying to placate us until the next time the people downstairs raise a ruckus. I'm trying to make peace with being here, but man, I cannot wait until our lease ends.

I agree, rent a house. We currently rent a house in Denver (talk about a housing shortage). Thankfully we are renting because if we owned this house we would be more than broke with repairs. We have owned and unless we build it ourselves, I have no interest in buying someone else's problems. We have been discussing moving back to the mountains (Steamboat) and although we could save a little rent by moving into an apt that MIL rents out, we would be living next door to her again (BTDT). But I would also have to take a pay cut. Next option is to try and save 50,000 for a down payment....lets see, yeah I don't see that happening anytime soon.Oh yeah and we just signed a 15 mo lease in January. Of course I had to be the "meanie" and say we are staying put for at lease another year.

Yes, if you're in Denver, then you know EXACTLY what I mean about the housing shortage. You make a great point about not buying someone else's problems. That's the thing about our town: housing is expensive, but many of the houses are also in terrible shape. That said, we may have the option to purchase a new build if we're willing to live a little ways outside of town. Not sure I want to do that, but we're considering it.

Tough choice! I think the most important factor (for me, anyway) is really your long-term plans. If you are committed to the area, I think buying eventually makes sense, but if you feel the market is poised to crash in the next few years, might as well wait.

We bought a complete fixer-upper at the height of the market, right before it tanked and it has taken us nearly 12 years to regain our equity position with it. In that time, we've certainly poured a lot of money into maintenance, renovations and repairs. That said, I love our house--we've slowly made it into just what we wanted it to be, our location (1 mile from the ocean) is amazing and although we plan to be here until we're unable to live independently anymore, I do feel that if we needed to sell, we'd make $.

As long as you budget for 'unexpected expenses' when figuring out how much to borrow for a mortgage and err on the conservative side when figuring out your price range, you'll be fine. Both times we've bought homes, the brokers have tried to get us to borrow much more than we felt comfortable doing and we resisted. While my house is much smaller than that of most of my friends, so is my mortgage payment (and most of my utility and upkeep expenses).

We are totally committed to the area. That said, I do not see the market crashing anytime soon, especially because it's a popular place to purchase investment properties. Our best bet may actually be purchasing sooner rather than later... and perhaps a bit outside of town.

I've got nothing to say here but YEP I FEEL THIS. Although for me it's the upstairs neighbors (and sometimes the ones to either side of me), not the downstairs ones. I guess noise travels down in my building.

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We're a family of four - Thirtysomething, Fortysomething, the Kiddo, and The Very Expensive Feline - that's racked up $76K in credit card and student loan debt. The plan: To pay it off in a little less than five years. Join us as we budget, save, dream, and reach our goals.